Florida has no state income tax, but you will still pay sales tax, property tax, and other state fees
Florida does not tax wages, salaries, or investment income at the state level. This is one of the largest tax differences between Florida and most other states. However, the absence of income tax does not mean Florida has no taxes. The state collects revenue through sales tax, property tax, corporate tax, and various smaller fees and excise taxes.
If you work in Florida or move there, you will not owe state income tax on what you earn. If you own property in Florida, you will owe property tax to your county. If you buy goods or services in Florida, you will pay sales tax at the register. The combination of these taxes shapes the overall tax burden for Florida residents and businesses.
Key Takeaways
- Florida has no state income tax on wages, salaries, retirement income, or investment gains, which is a major difference from 41 other states.
- Florida's sales tax starts at 6 percent at the state level, but counties add their own rate, bringing the total to between 6 and 7.5 percent depending on where you shop.
- Property owners in Florida pay county property tax based on the assessed value of their home or land, with rates varying by county from roughly 0.7 to 1 percent of value.
- Florida collects corporate income tax, documentary stamp tax on real estate transfers, and excise taxes on fuel, cigarettes, and alcohol.
How Florida's sales tax works
Florida's state sales tax rate is 6 percent. Counties are allowed to add their own local sales tax on top of this, ranging from 0.5 to 1.5 percent. The total sales tax you pay depends on which county you are in. For example, Miami-Dade County adds 1 percent, bringing the total to 7 percent. Duval County (Jacksonville) adds 1.5 percent, for a total of 7.5 percent. Some counties add only 0.5 percent, keeping the total at 6.5 percent.
Sales tax applies to most goods you buy in stores, online purchases shipped to Florida, and many services. Groceries are taxed at a lower rate of 6 percent (no county add-on). Prescription medications are not taxed. Restaurant meals and prepared foods are taxed at the full rate. When you see a price tag, the amount shown does not include sales tax — the tax is added at checkout.
Property tax in Florida counties
If you own a home, land, or commercial property in Florida, you owe property tax to your county each year. The tax is based on the assessed value of the property, not the price you paid for it. County assessors determine the value, and property owners receive a notice of assessed value in the mail. You have the right to challenge the assessment if you believe it is too high.
Property tax rates vary by county because each county sets its own millage rate (the amount per $1,000 of assessed value). Rates typically range from 0.7 to 1 percent of the property's assessed value per year, though some counties are higher. A home assessed at $300,000 in a county with a 0.9 percent rate would owe roughly $2,700 in property tax annually. Property tax bills are due by March 31 each year, though you can pay in installments.
Florida offers a homestead exemption that reduces the assessed value of your primary residence by $50,000, which lowers your property tax bill. You must own the home and live in it as your main residence to claim this exemption. Homeowners over 65 may may have access to for additional exemptions.
Corporate income tax and business taxes
Corporations doing business in Florida pay a corporate income tax of 5.5 percent on net income. This applies to C corporations and certain other business entities. Sole proprietors and partnerships do not pay this tax at the state level, though they may owe federal self-employment tax.
Florida also collects a documentary stamp tax when real estate changes hands. The buyer or seller (depending on the contract) pays this tax based on the sale price. The rate is $0.70 per $100 of the sale price. On a $400,000 home purchase, the documentary stamp tax would be $2,800. This tax is separate from sales tax and is collected by the county clerk when the deed is recorded.
Excise taxes on fuel, cigarettes, and alcohol
Florida taxes specific products at higher rates than the standard sales tax. Gasoline and diesel fuel are taxed at $0.389 per gallon at the state level (as of the most recent rate). Counties may add additional fuel tax. Cigarettes are taxed at $2.175 per pack. Beer, wine, and spirits each have their own excise tax rates that vary by type and volume.
These excise taxes are built into the price you pay, so you do not see them as a separate line item. They exist partly to raise revenue and partly to discourage consumption of these products. The rates can change when the legislature passes new tax laws, so the amounts you pay may shift from year to year.
Who does not pay Florida income tax
Anyone living or working in Florida avoids state income tax on earned wages. This includes employees, self-employed workers, retirees, and investors. A person who moves to Florida from a state with income tax will no longer owe that state's income tax once they establish Florida residency. However, they may still owe federal income tax to the IRS, which applies in all states.
The lack of state income tax makes Florida attractive to retirees and high-income earners. Retirees drawing from pensions, 401(k) accounts, or investment portfolios owe no Florida state tax on this income. Military pensions, Social Security, and other retirement income are also exempt from Florida state tax. Federal tax still applies to most of these income sources.
How Florida compares to other states on taxes
Nine states have no income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and New Hampshire (which taxes only investment income). The other 41 states tax wages and salaries. States without income tax typically rely more heavily on sales tax and property tax to fund government services, which is why Florida's sales tax is relatively high compared to some other states.
The overall tax burden in Florida depends on your personal situation. A high-income earner benefits greatly from no income tax. A person who rents and buys little pays mainly sales tax. A homeowner pays property tax, which can be substantial. Comparing Florida's total tax burden to another state requires looking at all three sources — income, sales, and property — not just one.
Frequently Asked Questions
Do I have to pay federal income tax if I live in Florida?
Yes. Florida has no state income tax, but the federal government taxes income in all states. You will owe federal income tax on wages, self-employment income, and most investment income, regardless of where you live. You file federal taxes with the IRS using Form 1040 and related schedules.
Can I claim homestead exemption if I just moved to Florida?
You must own the home and live in it as your primary residence. You can file for homestead exemption in the year you move, but the exemption typically takes effect the following tax year. Contact your county property appraiser's office to file the process — the important date is usually March 1, though some counties extend it.
What happens if I buy something online from out of state and have it shipped to Florida?
You owe Florida sales tax on the purchase. Many online retailers now collect and remit this tax automatically. If a retailer does not collect it, you are technically responsible for paying "use tax" to Florida, though enforcement is limited for individual purchases. The rate is the same as sales tax for your county.
Is Social Security taxed in Florida?
Social Security is not taxed by Florida. However, the federal government may tax it depending on your total income and filing status. This is a federal rule, not a Florida rule. Check with the IRS or a tax professional about your specific situation.
Do I owe property tax on a vacation home in Florida?
Yes. Property tax applies to all real estate in Florida, whether it is your primary residence or a second home. You cannot claim the homestead exemption on a vacation property because that exemption is only for primary residences. The property is assessed and taxed at the full rate for your county.